Fashion retailer SuperGroup's (SGP) positive first-half trading update, confirming strong retail like-for-like sales momentum through the second quarter, helps the swaggering share price to strut another 7.6% higher to £15.95 on Thursday. The Superdry brand-owner cheers with news gross margins are tracking ahead of expectations and expresses confidence ahead of Christmas.
Since the appointment of seasoned retailer Euan Sutherland as CEO in October 2014, a move enabling co-founder Julian Dunkerton to focus on product development, SuperGroup's shares have surged higher. Today's update sustains the positive share price momentum behind the owner of Superdry, the 'British lifestyle brand' spanning clothing, accessories, footwear and cosmetics.
Albeit delivered against weak comparatives, Sutherland reports 17.2% growth in retail like-for-like sales for the 26 weeks to 24 October, with same-store sales growth a healthy 15.5% in the second quarter, boosted by a strong showing from e-commerce. The wholesale division shrugged off the weaker euro to generate 8% sales growth to £82.7 million in the half.
One of the key takeaways from today's update is SuperGroup's better-than-expected gross margin guidance, with the impact of currency more than outweighed by a growing portion of higher-margin retail sales in the top-line mix.
Sutherland also highlights strategic progress with global retail selling space expansion - SuperGroup now has a physical presence in 51 countries - as well as in restructuring the US business, having bought back its US licence in March, and in setting-up its 50:50 joint Chinese joint venture with local retailer Trendy International.
SuperGroup, with a bumper £80 million net cash in the coffers, is feeling confident ahead of the peak selling season and with good reason. It now has a product range with broad appeal and a more rounded assortment including a strengthened womenswear offering and 'Superdry Sport' and 'Superdry Snow' ranges. The £1.2 billion cap is also launching an Idris Elba range in stores later this month.
'With a successful first half completed, the business is well placed for the all-important peak season and we remain confident of delivering full year profits in line with our existing guidance,' says Sutherland, though he does temper enthusiasm by stressing that 'comparatives throughout the second half are more challenging.'
